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A few years ago, if some angel or 'friend of family' had a few hundred $k sitting around, they were getting 0 return on it. Investing in speculative startup id
by mgkimsal 3y ago
A few years ago, if some angel or 'friend of family' had a few hundred $k sitting around, they were getting 0 return on it. Investing in speculative startup ideas was at least a promise of a return. Now those same startup ideas are going to be competing against 5% no risk return. Some of the ideas like the one referenced above may not see $6m-level funding activity again because of higher rates now.
- drBonkers 3y ago> A few years ago… a few hundred $k sitting around… getting 0 return on it. People say this with poorly invested money all the time, but I must be missing something. You could invest it in an index fund, say the S&P 500, and annually yield over 10% on average [1]. [1] https://www.officialdata.org/us/stocks/s-p-500/2016?amount=100&endYear=2023 https://www.officialdata.org/us/stocks/s-p-500/2016?amount=1...
- Archelaos 3y ago> ... competing against 5% no risk return Until recently, this was less than inflation. A year ago the inflation rate of the US$ was more than 8%. So the net result when applying an interest rate of 5% was -3%. Less than in most of the period before 2021 when assuming an interest rate of 0%. I doubt that investors are not aware of this, arn't they?
- deleted 3y ago[deleted]